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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6162 OF 2005

Shantilal Gulabchand Mutha … Appellant

Vs.

Tata Engineering & Locomotive Co. Ltd.  & Anr. … Respondents

O R D E R

1. This appeal has been preferred against the judgment and order  

dated 22.6.2005 of the High Court of Judicature at Bombay, passed in  

Appeal No.478 of 2005 in Notice of Motion No.503 of 2004 in Suit  

No.1924 of 1988.

2. Facts and circumstances giving rise to this appeal are :

A. That  the  appellant  had  purchased  five  Tata  Diesel  Vehicles  

from the respondent No.1 for a sum of Rs.9,58,913/- which was to be  

paid  in  8  installments  through  respondent  No.2  as  per  repayment  

schedule.  The  appellant  alleges  that  eight  Bills  of  Exchange  were  

drawn by the respondent no.1 upon the respondent no.2 – banker of

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the  appellant  and  by  way  of  which  the  entire  amount  was  paid.  

Respondent no.1 filed Suit No.1924 of 1988 on 2.6.1988 against the  

appellant as well as  the banker for recovery of sum of Rs.5,66,000/-  

alongwith interest.  Summons were served upon the appellant and he  

entered appearance through advocate to contest the suit.  However,  

subsequently under the impression that the entire amount had already  

been  paid,  he  did  not  file  the  written  statement.   The  High Court  

decreed the suit vide judgment and decree dated 12.11.2003 under the  

provisions of Order VIII Rule 10 of the Code of Civil Procedure 1908,  

(hereinafter  referred  to  as  ‘CPC’)  without  considering  any  issue  

involved therein or taking note of the pleadings in the plaint itself.

B. Aggrieved, the appellant took out a Notice of Motion bearing  

no.503 of 2004 in the said suit for setting aside ex parte decree dated  

12.11.2003, however, it  stood rejected vide order dated 10.12.2004  

holding it to be not maintainable in view of division bench judgment  

of the Bombay High Court wherein it had been held that any decree  

passed under Order VIII Rule 10 CPC could not be subjected to the  

application under Order IX Rule 13 CPC.

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C. Aggrieved,  the  appellant  filed  the  appeal  which  has  been  

dismissed  vide  order  dated  22.6.2005  concurring  with  the  learned  

Single Judge.

Hence, this appeal.

3. We have heard Shri Prasenjit Keswani, learned counsel for the  

appellant  and  Shri  Debmalaya  Banerjee,  learned  counsel  for  

respondent no.1 and perused the record.

4. This Court in Balraj Taneja & Anr. V. Sunil Madan & Anr.,  

AIR 1999 SC 3381 dealt with the issue and held that even in such  

fact-situation, the court should not act blindly on the averments made  

in the plaint merely because the written statement has not been filed  

by the defendant traversing the facts set out by the plaintiff therein.  

Where a written statement has not been filed by the defendant, the  

court should  be little cautious  in proceeding under Order VIII,  

Rule 10, CPC. Before passing the judgment against the defendant it  

must ensure that even if the facts set out in the plaint are treated to  

have been admitted, a judgment could possibly by passed in favour of  

the plaintiff without requiring him to prove any fact mentioned in the  

plaint.  It is a matter of Court’s satisfaction and, therefore, only on  

being satisfied that there is no fact which need be proved on account  

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of  deemed admission,  the  court  can  conveniently  pass  a  judgment  

against  the  defendant  who  failed  to  file  the  written  statement.  

However, if the plaint itself indicates that there are disputed questions  

of fact involved in the case regarding which two different versions are  

set out in the plaint itself, it would not be safe for the Court to pass a  

judgment without requiring the plaintiff  to prove the facts so as to  

settle  the  factual  controversy.   The power  of  the  court  to  proceed  

under Order VIII, Rule 10 CPC is discretionary.  The court further  

held  that  judgment  as  defined  in  Section  2(9)  CPC  means  the  

statement given by the Judge of the grounds for a decree or order.  

Therefore,  the  judgment  should  be  self-contained  document  from  

which it should appear as to what were the facts of the case and what  

was the controversy which was tried to be settled by the court and in  

what manner.  The process of reasoning by which the court came to  

the  ultimate  conclusion  and  decreed  the  suit  should  be  reflected  

clearly in the judgment.  The court further held as under:-

“Whether  it  is  a  case  which  is  contested  by  the  defendants by filing a written statement, or a case which  proceeds ex parte and is ultimately decided as an ex parte  case, or is a case in which the written statement is not  filed and the case is decided under Order 8 Rule 10,  the  court  has  to  write  a  judgment  which  must  be  in  conformity with the provisions of the Code or at least set  

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out  the  reasoning  by  which  the  controversy  is  resolved.” (Emphasis added)

5. In  Bogidhola Tea & Trading Co. Ltd. & Anr. v. Hira Lal  

Somani, AIR 2008 SC 911, this Court while reiterating a similar view  

observed that a decree under Order VIII, Rule 10 CPC should not be  

passed unless the averments made in plaint are established.   In the  

facts and circumstances of a case, the court must decide the issue of  

limitation also, if so, involved.  

(See also: Ramesh Chand Ardawatlya v. Anil Panjwani, AIR 2003  

SC 2508)

6. In view of the above, it appears to be a settled legal proposition  

that  the relief under Order VIII  Rule 10 CPC is discretionary,  and  

court  has  to  be  more  cautious  while  exercising  such power  where  

defendant  fails  to  file  the  written  statement.  Even  in  such  

circumstances, the court must be satisfied that there is no fact which  

need to be proved in spite of deemed admission by the defendant, and  

the court must give reasons for passing such judgment, however, short  

it be, but by reading the judgment, a party must understood what were  

the  facts  and  circumstances  on  the  basis  of  which  the  court  must  

proceed, and under what reasoning the suit has been decreed.  

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7. The instant case is required to be examined in the light of the  

aforesaid settled legal propositions.  It is evident from the plaint that  

eight Bills of Exchange, all dated 4.6.1982 for the respective amounts  

had been inclusive  of  interest  and each one of  the  said  bills  were  

accepted  by  the  appellant  payable  at  the  Mercantile  Bank  Ltd.  

Bombay and the said bills were discounted by the respondent/plaintiff  

with its bankers.  It is further admitted in the plaint that the bank of  

the appellant paid the said amount to the respondent/plaintiff on the  

respective dates, as the five amounts have been mentioned in para 5 of  

the plaint.  However, as the same did not satisfy the entire demand,  

the suit was filed with the following prayer:-

“That the Defendant No.1 and Defendant No.2 may be  ordered and decreed to pay to the plaintiff  the sum of  Rs.999388.30p.  as  mentioned  in  paragraph  7  above  together with interest on the sum of Rs.5,66,000/- at the  rate  of  18.5%  per  annum  from  the  date  of  suit  till  payments.”

8. The Trial Court while deciding Suit No.1924 of 1988 decreed  

the suit vide judgment and decree dated 12.11.2003, which reads as  

under:-

“Advocate for the plaintiffs is present.  Nobody is present  for the defendants.  The matter is on board for proceeding  against the defendants for want of written statement.  Suit  

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is  of  1988.   So  far  no  written  statement  is  filed.  Therefore, there shall be decree in favour of the plaintiffs  and against the defendants under Order VIII Rule10 of  the Code of Civil Procedure for a sum of Rs.9,99,388.30  with interest on the amount of Rs.5,66,000/- at 12% p.a.  from the date of the suit till realization and costs. Prayer  (a)  only  of  the  plaint  is  granted  in  the  above  terms.  Decree be drawn up accordingly.”

9. The appellant take Notice of Motion to set aside the aforesaid  

judgment  and  decree  which  was  dismissed  and  the  said  order  of  

dismissal  has  been  approved  by  the  division  bench.   We  are  not  

examining the issue  as to  whether  such a  judgment  and decree ex  

parte could be subjected to the provisions of Order IX Rule 13 CPC  

but the court has not examined as to whether the suit was filed within  

limitation and whether on the basis of pleadings, the relief granted by  

the court could have been granted.  The court did not even consider it  

proper to examine the case prima facie before passing the decree, as is  

evident from the above quotation. The same is complete impugned  

judgment.  

10. As the Trial Court failed to meet the parameters laid down by  

this court to proceed under Order VIII Rule 10 CPC, the judgment and  

decree of the Trial Court dated 12.11.2003 is set aside and the case is  

remanded to the Trial  Court  to  decide  afresh.   The appellant  is  at  

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liberty to file the written statement within a period of 3 weeks from  

today and the Trial Court is at liberty to proceed in accordance with  

law thereafter. As the matter is very old, we request the Trial Court to  

conclude the trial expeditiously.  The Original Record, if any, may be  

sent back forthwith.    

Before parting with the case, we would like to clarify that we  

have not decided the issue as to whether application under Order IX  

Rule 13 CPC in such a case is maintainable.  

The appeal is disposed of accordingly.

...……………………………...................................J.                    (Dr. B.S. CHAUHAN)

…..………………………….. ...................................J.  (FAKKIR MOHAMED IBRAHIM KALIFULLA)

NEW DELHI MARCH 18, 2013.

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